The Affordable Care Act and You

With yet another delay in the Affordable Care Act’s employer mandate, this may seem like a good time to breathe a sigh of relief and focus on more pressing problems.

But don’t relax for too long -- the mandate is coming. This year is a great time to start analyzing your current workforce, and to make sure you have the right data to make smart decisions next year.

When is it happening?

The U.S. Treasury Department in February released final rules governing the act’s employer mandate. While employers may not be exactly celebrating this release, it does add some certainty to an area that has seen numerous delays, extensions, and transition rules. Let’s call that a silver lining.

These rules give employers with between 51 and 100 employees another year to comply with the requirement to offer all full-time employees health care coverage. They also grant a little transition relief to larger employers, like school districts.

In 2015, if an employer with 101 or more employees offers affordable coverage with minimum value to at least 70 percent of its full-time employees, there will be no global penalty. The global penalty is the annual $2,000 per full-time employee penalty for not offering coverage.

If you do fall subject to this penalty, for 2015 only you will be allowed to disregard 80, rather than the normal 30, full-time employees.

Of course, any full-time employee who is not offered coverage and who receives a subsidy for coverage through the act's Marketplace still will trigger the per-person annual penalty. Beginning in 2016, all large employers (50 or more employees) will be required to offer coverage to at least 95 percent of full-time employees in order to avoid the global penalty.

The other helpful piece of transition relief relates to employers who offer health care coverage on a fiscal year plan year (e.g., coverage starts on July 1 or Oct. 1, rather than Jan. 1), as many school districts do. Employers who have been offering health insurance on a fiscal year plan do not need to comply with the mandate until the first day of their 2015 plan year.

In other words, if you have always offered health insurance from July 1 to June 30, you now have until July 1, 2015, to offer affordable coverage to your full-time employees. No employer penalties will apply for the months in 2015 before the first day of your plan year. However, if affordable coverage providing minimum value is not offered by the first day of your 2015 plan year, you will be penalized for each month in 2015 during which no suitable coverage was offered.